Britain’s unemployment rate has dropped to 4.0%, with wage growth also easing, according to official data released on Tuesday. This trend has reinforced analysts’ expectations that the Bank of England (BoE) will begin cutting interest rates next month.
The Office for National Statistics (ONS) reported that the unemployment rate decreased from 4.1% in the three months ending in August compared to the previous three months. Additionally, the annual growth in employees’ average regular earnings fell to 4.9%, marking the lowest rate in over two years.
Ashley Webb, a UK economist at Capital Economics, noted that these figures strengthen the likelihood of the Bank of England lowering interest rates from 5.0% to 4.75% at its next policy meeting in November.
In its last meeting in September, the BoE opted not to implement consecutive cuts to borrowing costs. However, in August, it reduced the key rate for the first time since early 2020, bringing it down from a 16-year high of 5.25% as inflation began to stabilize.
The ONS is expected to release the latest inflation figures on Wednesday, with projections indicating that the annual rate may fall below the Bank of England’s target of 2.0%.
Written By: Praise Inalegwu